>> the time warner takeover is over. withdraws itsry $25 billion bid for the company. another potential merger melts downdown. sprint is said to have ended talks to acquire t-mobile. the russian president orders his government to respond to u.s. and eu sanctions. is the exit ahead? johnson says britain has nothing to fear from leaving the european union.

welcome to countdown. a very good morning. two deals have fallen through. what is going on? reneges ont murdoch a 25 billion dollar offer for time warner when everybody thought it was not going to go anywhere,, does it matter? this has me puzzled for little bit. of course it matters. not everyone recognized the capitulation. if you look at the share price, investors thought he would still go for it. secondly, he has thrown a bone back to foxx investors. it is something they have not -- they were not anticipating. it is a bit rushed.

we have both time warner and fox reporting this morning. >> you can imagine trying to defend. i think it is fascinating they decide to pull out of this deal so quickly. maybe they misjudged the timing. the buyback, what does it mean for shareholders? >> here we go. share price reaction was dramatic. 6%.shares rose about i love market psychology. time warner shares were just above $85. that was the bid price. though shares fell 14%, down to $73. so much for the time warner

board saying to us we were not even going to look at an offer that did not begin with $100. they are back at 73. off --estors any better offfox investors any better minus time warner but plus the buyback? >> this is in the britain times. the buyback will be completed over a year. that would add 1% to the 2015 earnings. 2.5% to the 2016 earnings. the question for the market is can he stay independent? is he vulnerable to another offer from the likes of verizon? around ande to turn

had to cbs? -- head to cbs? where does this leave them? >> we will get sky deutschland a.m. gs that 6:30 they will have to at a minimum in a conference call. >> will they come back? >> the whole issue why murdoch was not able to buy b-sky-b was the hacking scandal. plurality. you own too much, you own all of these various conduits of media. plurality was not the issue in the b-sky-b deal. this country has a long memory in regards to hacking and the consequences.

>> the talk of the town was that on bclt its entire stake -- b-sky-b after it took over time warner. on.s move so much to discuss. sprint is another company that has abandoned its bid for a stake in t-mobile. it would've combined the third and fourth largest carriers in america. sprint was competing with a french company, which made a 15 billion bid. the reasons why sprint, according to a person we've spoken to, i will not get bogged down in the reasons. financing and regulatory. this would have taken a while. ,> if the deal falls apart number three and number four, who is worse off?

egg onoks with more their face? >> subscribers, sprint which is 245,000 softbank, lost subscribers. under johnhich is prices,as been lowering they added 900-8000 subscribers. --900-8000 subscribers 908,000 subscribers. >> if t-mobile is up for grabs, iliad came in and pillaged the mobile market in france. you could walk out of the store with a 10 euros deal. you have iliad nipping at their

heels. it will raise its offer. it is looking to finance the $33 a share. sprint was offering 40. the talk of the town was maybe 37 would be enough because t-mobile would not like the regulatory issues. who is left on the table question mark dish network -- who is left on the table? dish network was interested in buying sprint. he said if the t-mobile sprint talks and, he would be interested. the other person to watch is carlos slim. it also could make a run at t-mobile. >> should we talk about the

other deal? boots is owned in switzerland. they currently own 45% of the company. they were going after the rest of the company. the part of the company they did not own. it was to be a tax and version deal. -- inversion deal. walgreen is one of the biggest dispensary company on main street. >> now they will not go for the tax inversion. >> that is huge. >> pfizer-astrazeneca. >> it will be interesting to see, this legislation trump

that? >> what have u.s. lawmakers been saying about it? >> they're trying to do the deal. do we get an announcement from walgreen? huge political pressure. durbin, we had richard an illinois democrat, sending a letter saying the company should decide to go through with the tax inversion. management would be turning people thaton the allowed walgreen to thrive and prosper. main street, not stupid. if they see corporate america running people that allowed walgreen to thrive and away in terms of paying toes --they did not seem care too much about apple. >> 80% of their cash is held overseas. in america, you care corporate

tax rate of 35%. that is why you want to domicile closer to europe, where you are paying 10%. saved $4d have billion. lobbyists their advise them on legislation. if the eu does not reform -- we look at what ramifications of an exit could be after the break. ♪

>> welcome back. time for today's company news. sprint has ended talks to buy t-mobile. the regulatory concerns outweigh the potential benefits of the deal. a new ceo would replace dan hutzler. -- t-mobile is said to iliad's proposal.

the move would put pressure on the french company to raise its offer. seeking possible partners to help finance the bid. lower provisions for loan losses and higher income from fees and asset sales upset tax charges. the bank's chief executive spoke to bloomberg about the numbers. jump in capital. i do not want to anticipate too much. but i am confident about the process. brexit. call it

that is exactly what morris johnson is set to recommend unless brussels reform. he will release the report in london this morning. he will say the outcome would be -- the better outcome would be for the u.k. to stay in a reformed u.k. for more on the research and paper is stephen booth. great to have you with us this morning. in many ways, when you read the press reports, look, reform the eu would be the best scenario and britain has nothing to fear leaving the european union. to achieveales sufficient reforms. rhetoric?

>> being in the eu means you have access to the single market. i think it is true to say that we know -- it would be no economic disaster if we left the eu. that is the question that is uncertain. she is talking about numbers and the reality, the city of london, reality. millions of jobs, millions of jobs could be created here in london if there is a reformation of the eu. however, to stay with the status quo, you are looking at 200,000. that makes it pretty simple, straightforward logic. i have to get reformation of the eu.

>> that is the key conclusion. the status quo is not an option. if things stay the same, it is not good for the u.k. economy. if the reform does not happen, we should not be scared of the threat of leaving. >> the economic advisor to borst johnson saidris leaving on good terms does provide a very strong outcome. how can we leave on good terms? >> one way of doing that is making a genuine effort to reform the club. what we have to do is set up a reform agenda that other people can buy into. if that doesn't work out, we can look at other options.

one of the things that came from that, it is key what other member states would agree to on a brexit scenario. the european parliament would have to approve any deals in the u.k. >> what about the new president? if seymour against the idea -- is he more against the idea of giving britain concessions? positive that he might be open to the idea of performing? >> it is too early to say. it could go either way. the key will be the national governments. angela merkel has expressed enthusiasm for reforming the eu. there are other countries that really want to see a more slim down trade focused eu.

concentrating on a few other things that tend to annoy the public and business. we look at the media frenzy there was this country about the appointment, a lot of people say what europe has just done is a representation of a lack of desire to change and reform. the appointment is a pr death now in this country -- death now in this country. angela merkel supported it. concern.as a great more steps in that direction, you will see the risk of a brex it increasing. it was allowing the european parliament to set the agenda and not the national governments.

>> what are the ramifications of today's report? courage said, i have the to lead europe. >> that is politicking. >> i think it means the general election, brexit is on the agenda. it could happen if there is not significant reform. could be interesting to see. >> he might announce that he is running in a few weeks. >> i love that part of the story. stephen, you will stay with us. stay with bloomberg. johnson delivers his brexit report. do not miss that interview.

it is 10:15 a.m. london time. >> we will tell you who viewers that came out on top with the pro-independence and pro union leaders went head-to-head last night in the first televised debate. ♪

>> welcome back to countdown. in six weeks time

on whether to exit the united kingdom. the leaders of the pro-independence and pro union campaigns debated in glasgow. an independent scotland would be able to keep the british pound. >> you want a currency union if we vote for independence. it seemed like getting a divorce and keeping the same joint bank account. on the other side, they're saying no. what is plan b? >> it is logical and desirable to have a currency union because scotland is england's second-biggest export market. in the interest of scotland and united kingdom to have a currency union. we will keep the pound because it is logical and desirable.

>> we sell 70% of what we do to england and they sell 10% to us. i ask you again, the pound belongs to the u.k. they thought that alastair darling was the most convincing. stephen booth joins us now. a currency union without a political pact was stupidity on stilts. last night's debate came down to the pound. union in thecy eurozone about the lack of fiscal union and the problems that has caused in the eurozone. and the discussion about brexit. it is much more integrated into the u.k. than the u.k. is into the eu.

>> he dismissed the u.k. opposition sharing the currency as a campaign tactic designed to scare the people of scotland. >> the key question is the uncertainty. no one necessarily knows what will happen. >> thank you for joining us today. they to chat to you about the johnson report and the debate last night. was -- i got it wrong. i think it is a contentious issue. mayor.s the london not the lord mayor of london. >> when you wake up at 2:00, these mistakes are justified. >> as fedex express makes acquisitions expand across

africa. we look at the opportunities with doing business in the continent. more to come in the next half-hour. ♪

>> welcome back. let's look at the dollar index which is a gauge of the dollar cost performance against a wide array of currencies. it's at its highest level in nine months today, versus a whole range of currencies. that's on signs the u.s. economy is strengthening. we also have tensions over ukraine boosting the appeal of american assets. this gauge rising to its highest since september. we had a gauge showing factory

orders and service activity rose and the federal reserve bank of dallas president richard fisher said it is becoming more hawkish. it raises the specter of possible invasion. we will talk to ryan about that in just a few minutes. that is the situation in that currency markets. these are the bloomberg hop headlines today. tody to push for the u.k. leave the eu if david cameron fails to achieve sufficient reforms. johnson says the best option would be for britain to remain in a reformed eu. that will be live here on bloomberg a little later this morning. president vladimir putin signals he is ready to retaliate for

u.s. and eu sanctions. he ordered his government to prepare a response. the russian newspaper reports one measure could be a ban on trans siberian flight by european carriers. and u.s. president barack obama says he wants to shift the focus in africa away from providing aid and towards fostering investment and trade. businessocus of the for them in washington was on approving -- improving the electrical power infrastructure in africa. >> you look at the gap, and we saw that. .et us now team up

we will roll it out. one of the assets it has agreed to sell. here to explain all the machinations to us. it came in atss, 45.3 million euros. i don't think it is a huge issue. miss,eless, it's a narrow the same thing for sales. 82,000 customers in the second quarter, so interesting results. the big issue is what they had to say about the deal. as you pointed out, b-sky-b has offered to buy fox's 57 percent stake in skied door slam. not all the investors are happy about that. -- in skyhere is no deutschland.

one has to wonder if the whole stake toox selling its b-sky-b was to raise money to buy time warner, what does it mean if fox is no longer interested in buying time warner? what does it mean for this deal? i think it will be an interesting stock to watch today . also interesting to see what happens with liberty global which is competing with them. to theill come down higher valuation. still possibly it's what murdoch wants, which is that dan synergies.ed up with john malone could come and make that deal. thank you very much. back to another of our top stories. vladimir putin has order the kremlin to respond as u.s.

sanctions -- he said moscow has already drawn up a list to propose retaliatory measures. you get three for one. >> interesting. everybody has been waiting for the shoe to drop, how is bell -- vladimir putin going to retaliate? he said we just need to be smart about how we do it so we protect russian consumers and russian producers. the banks and western europe. early yesterday morning, the russian business daily came out with a report sourcing one ,nonymous government official which smells a little bit like a trial balloon from the russian government. to go out and say they would put out this report unless the u.s. government was

interested in putting out this report, but one piece of retaliation might be to ban overflight rights across russia. the fastest way to get from , let's europe to asia say northern or eastern asia, is to go right over russia and siberia. react torline stocks that very negatively yesterday. investors take this very seriously. air france, klm fell 3.8%. so investors have been concerned that in fact this might be one of the options in the cards. >> the world bank resident has been speaking at the trade summit in washington. business is only just realizing the opportunities africa presents.

leaders in the american business community who probably didn't know very much about africa or getting a very different sense of what is going on in africa. we been saying it for a long time, they have been growing. policies ingood place. the central banks are independent. a lot of good things about africa. but i think the ceo didn't quite know what it was going to be until they got here and thought for themselves. itsedex is spreading logistics network across the continent. thanks for joining us today. it's very important, if you look at where africa is growing, we are starting to see good gdp growth, particularly in the southern africa parts. was starting to see international trade be a more important part of that growth.

we are seeing a lot of direct foreign investment going into africa. it was an opportune time for us. we think africa is going to be growing start in the global economies. fedex will be well-placed of acquisitions we made to participate and help not just the businesses in africa and south africa, but also to help the african continent overall. based give us an idea of what africa represents when it comes to the global business, how fast do you see business in the region growing? >> we don't break out our individual regional figures in that way. certainly we are seeing some healthy growth in parts of our african business. the important thing is super swift, the company we bought, is not just south africa. in includes six other southern african countries, giving us a strong network in that part of the african continent. that is a big driver,

sub-saharan africa component is a big driver of where the overall african gdp and international trade is going to go. that's one of the things we have .rawn out this week the fastest-growing economies are in sub-saharan africa. >> what are the challenges? a country imagine in that big and adverse, the challenge of actually running up business like this must be huge. what is the single biggest challenge? >> this apprising thing is actually, and you're right, there are challenges. of course there are always challenges when you go into new markets and emerging markets. what is surprising is the challenges are very similar to other emerging markets. over 90% of businesses in south africa are looking to participate in global trade. that'll have the confidence and whichces or experience,

is where we are trying to play a role. for instance we have free thousand what we call global trade specialists who are used to dealing with how to get packages across borders, to help customers, to help people who want to important export in the safe movement of a half-moon packages a day across borders. it's that type of situation that southern or is dealing with, very much like around the world. they are just perhaps a little more progress than some of the other markets. have barack obama the african leadership summit. deals, gen worth of came out with a $2 billion commitment by 2018 to africa. how do we look through those top headlines?

are there really an aggressive push to do more business in africa, and what does that mean for your business? >> i think it's a realization from many of the big businesses of the future potential that africa is going to have in the global economy. everybody is beginning to really wake up to that situation. that again is an important part of why we have made the acquisition that we have their, to connect the global customers would trade with on a daily basis, to give them great access into south africa and out of south africa as well so they can build their business links through fedex. that's really another important part. it's not just about dealing with customers in southern africa. it's really thinking about this as a global situation and how we connect the global international trade in and out of africa. >> i have to act -- ask you about the ebola virus. is it having an impact on your business?

, oure first thing is sympathies obviously to anyone who has been impacted by the virus. the acquisition we have made in southern africa is where it is not a problem at the moment. at the same time, would closely monitor what the situation is. we will look on a case-by-case situation of what contingencies will need to be. at the moment it is not being disruptive to our operation, and we hope it stays that way. with bobby flay continue to monitor that situation. >> david, thank you very much. >> the patent war winding down between apple and samsung. we will have all the details on their new agreement coming up after the break. stay with us. ♪

>> joining us for more on apple and the samsung patent is david in hong kong. good morning, david. what is the news? >> after years of legal sparring , millions in litigation costs

around the globe, samsung and apple finally putting out joint statement that they're basically patent suitsese against each other, everywhere except the united states. that is the operative phrase here. we are basically looking at litigation cost jurisdictions in australia, south korea, japan, germany, the netherlands. as very complex, obviously, in different jurisdictions. but apple is saying is, you stole the iphone design. usingg is saying you're our wireless transmission technology without our permission. doesn't mean because you have a joint statement that it ends here. the statement went on to say that this agreement does not involve any licensing arrangement and the companies are continuing to pursue existing cases in the u.s. courts. so it's unclear what the business impact would be at this point. keep in mind a lot of these cases involve earlier models of

the smartphones. what is clear that both will be saving a lot of money paying the law years. ,raig shifting to china automakers there are running into some big trouble. what is happening? it's this ongoing regulatory that's being spearheaded by this date economic planning agency. it's basically talking about prices of spare parts. the latest one here as this rate on the shanghai office of mercedes-benz. mercedes put out a statement and basically said they are confirming that were taking the initiative to cut prices of more than 10,000 products. maybe three or four hours ago, state news in china reporting

that the same state body has completed its probe on 12 japanese firms and will be imposing punishments. -- this one is still ongoing at this point. >> thanks david and hong kong. the first half numbers are out. >> what is the view out there? is said that the institutional investors are calling for a robust succession plan. i think there a very clear difference. the singapore investment fund has 18% of the company.

also asking for succession plans, and interestingly, the company put out a statement on the 24th saying we take our succession planning very seriously. one analyst actually said it is a serious problem. it warned profits will drop to 20%. >> it had a golden decade, didn't it? full-year profit rose every year. what happened? >> what happened was, theyaphically speaking, put their eggs in what was seen as a good growth basket. as banks are not perceived being a ceo they could restructure a bank. the first half for hsbc, bad debt rose 16%.

is, china in the first quarter, bad loans rose by 23%. first-half profit at hsbc in their investment bank went down by 50%. we will keep an i on the asia revenue. sandsooked at peter tenure, he joined in november 2006. , that is updividend by 3%. it appears competitors are down by 10%. he has outperformed his peers since he took over on up your share price asis. index which banks includes the rbs of the world, down by 60%. outperformed on everybody since he was ceo.

coming up, sound the alarm. a strong warning for manchester united's new manager. we will have that story and more in today's countdown newspaper statement. have the mind games begun? ♪

>> welcome back. i'm mark arden.

poppies, the commemoration of the great war. it's a very iconic photograph, the duke and duchess of cambridge along with his royal is, prince harry. this is at the tower of london. this ispen page 13, where it becomes much more of a professional photograph. poppies appear to be literally spewing from one of that for its. the imagery is just absolutely amazing. >> i thought we would focus on football. it's football season here in england, it's almost upon us and the mind games have begun. this time it's the manager of liverpool, the manager of

manchester united. there's been a bit of attornment taking place in the united states, liverpool and manchester united. it's called international champions cup. guess who won it, manchester united. brendan rodgers overnight will belouis van gall surprised by the intensity of the revere league. he has managed barcelona, munich, and holland in the world cup. he's going to be surprised by the intensity of the premier league.

it's community shield this after, and then the week the season begins. you will have nine months of me talking about football. >> give him his own football show. >> what have you got? >> i find this a fascinating story. he has agreed to pay $100 million to settle charges of robbery. the question everyone is asking, is he driving his way out of bribery charges? heranswer is no, this is sickly legal. criminal cases can be settled for financial compensations in some cases under criminal law. the outrage here is this is the highest settlement in a criminal proceeding against any individual anywhere ever in german history. the paper is up in arms, but my favorite part, bernie was asked

if he could come up with what -- $100 million in a weeks time, and he said yes. >> nigel wilson on earnings from the insurer at the top of the hour. stay with us. ♪

>> putin lashes out. stocks in the u.s. and asia falls as the russian president orders his country to respond to sanctions. we time warner takeover is over. rupert murdoch's 21st century fox withdraws its bid for the company. another potential mergers settles down. sprint has ended talks it acquiring the mobile u.s.. says britain has nothing to fear from leaving the european union. that will be live here first on bloomberg.

welcome to "countdown." i am mark barton joined by manus cranny. we are getting information from journey. -- germany. >> orders dropped by 3.2%. they were expecting a rise of .9%. this is a big drop. the forecast was for a rise. let's see if we can bring you the euro-dollar. that is where there will be an impact. what ryan hasugh been talking about, which is russia, the impact in terms of sentiment, eco-decline. the euro drops marginally. factory orders certainly underwhelming. meetingead of the ecb's is tomorrow. that makes it more interesting. >> the euro is not dropping. 1.3358. that is a big disappointment. >> germany is the engine of the

eurozone. does that mean the ecb needs to unveil more measures? probably not tomorrow. >> the export side of their business. we are going to see this carry through into the second half. we have seen companies one that the likes of adidas saying these sanctions will have an impact. leave it there. >> us talk about legal & general. it is the u.k.'s biggest manager of pension assets. top-operating profit has raised by 11%. the taxes up by 9%. earnings per share up by 9%. operational cash generation very important. this is a measure of earnings before dividends and reinvestment. it rose by 13% in the first half of the year. the second quarter was strong because the first quarter, we saw it increase in just 13%. the interim dividend is up by

21%. annuity assets are up by 20%. george osborne, the chancellor in the u.k. dropped a bit of a bombshell in march. he scratched rules requiring retirees to buy insurance annuities with their retirement funds. shares of legal & general fell 11% over the next three days but they have rebounded. >> the argument from legal and general -- we will talk to the ceo. where that trend is and what is happening to people. individual annuities may be dropping. we will counter that with our bulk annuities. big companies like bloomberg bike bulk annuities. we don't specifically do it but that is where they said the sales would come. >> decline for individual annuities in the first quarter was 40% lower. it will be fascinating to see -- that beinterrupts -- the other insurer from yesterday. >> they have a big asset

management arm, up by 7%. on a headline basis, things look good. we have earnings with the company and the ceo joining us in a few minutes. generale ceo of legal & , nigel wilson. that is in five minutes. we have two deals that have fallen through overnight. let's start with fox's unsolicited bid for time warner. what happened? reneges ont murdoch his offer for time warner, which she's has come up but time warner made it clear they would not entertain his offer and doubted they could offer anything interesting, it does not matter. >> i think he pulled the plug very early. >> the answer i think is yes because some investors thought that this deal might go through. who would doubt rupert murdoch? that was baked into the share price. >> they were thinking that he

was getting money from other sources to launch a higher -- >> the second issue is not just that. he is throwing investors at fox of bone. they announced a $6 billion share buyback. >> manus has done his math. >> manus has done his math. he read one of the australian papers. >> it happens so rarely. >> it is -- >> it makes sense. forgive me. to earningsn ads per share by about 1% and 2.5% in 2016. one of the lines here is that murdoch is so risk-averse in terms of debt. he went through before, offering $85 a share and the ability to make it up to 100 dollars a share was going to take more than selling sky et al. you. it is the aversion to taking on pulled the reason he has the deal on the chain. his stock price was down.

>> the share price movements -- >> i know it rallied. news, was up 11% on the after-hours trading. people liking the share buyback and liking the fact he has dropped the bid. unsurprisingly, share price was at $85. that is what fox, rupert murdoch was offering. share price fell 14% to $73. you mentioned that sky a tally up -- italia. miss, but the important aspect is they are reviewing the bid.or fox's 57% where is it? they're going to review it but is murdoch still interested? does it make sense, the idea to raise money to buy time warner?

now he will not buy it. does he need the money? analysts say it is good to consolidate. >> breaking news out of china. china's government is excluding apple's ipads and macbook laptops as products that can be bought with public money because of securities earns -- securities concerned. dell,eign brands like toshiba, and samsung are still on the july list. this is the breaking news. >> this is the background. apple is the latest technology company in the u.s. to be excluded from purchases and the reason why is escalating tensions between the countries over hacking and cyber-spying. >> the next review list will be 2015.n january of course, it is not just apple.

there has been antivirus software that chinese procurement agencies recently told government departments, stop buying the antivirus manufacturers from symantec, and also excluded microsoft from a government purchasing order. that was on the software side and echoes back to the point you made where there is an ongoing political feud in terms of spying. >> watch what happens with apple. the shares are trading at 15 times expectations for future earnings. to -- we haveck covered 20th century fox and time warner. there was another deal that class today. thed would've combined third and fourth largest phone carriers in america. the terms of the deal were never set foot sprint was competing iliad,french company,

which made a $15 billion bid for t-mobile. this assassinated. oftbank, the japanese company, for nine months has been trying to tie up sprint's company with the number four provider, t-mobile u.s.. there were doubts. the price was allegedly $40 a share. iliad offered 33. the doubts have laid out to derail the bid according to a person the real -- person familiar. the reasons -- regulation and financing. >> my question to you is who is left? does this open the pathway up for iliad? they really underbid. >> $34. last week when we talked about the story, there was a comment by analysts that said because of the lack of regulatory concerns which would involve iliad's bid, because it would keep for

hadlated players, sprint taken out t-mobile, there would have been three players. if iliad did a little bit more, maybe it would in the day. it seems that iliad is trying to raise its offer, but t-mobile might reject its bid. who is still interested? people say dish network. it tried to buy sprint. softbank one that. it could be interested. slim,od friend karloff one of the richest man in the world. he is will note in the communications space. american mobile, iliad, and dish network. >> we were just talking to ryan in terms of time warner. do they remain independent? do they do a merger with cbs? do they become a target? are they now more exposed in terms of verizon? is a day for walgreen as well. they will avoid the texan

version. as that referring to it from the eu. that is what boris johnson is set to recommend unless russell's reforms. -- brussels reforms. the london mayor will release a report here and he will say the best idea is for the u.k. to stay in a reformed eu but it will be one worse for a person to be remaining in an unreformed one. >> the scenarios are stay in the eu, reform. leave the eu. >> millions of jobs will be created if you continue in a reformed eu. that is option one. this is jared lyons. this is extrapolated over 20 years. this is the chief economist and advisor to boris johnson. >> the uncertainty for whatever

happens. >> 900,000. your remain in the eu with some stances -- some stance of reform and you create millions. you create 900 thousands if you leave the eu on good terms. >> how do you leave the eu on good terms? >> does the u.k., from a media point of view, have good terms with the eu at the moment? >> it does not look at it -- look like it. david cameron tried to derail eu jean-claude juncker presidency while the germans, the swedes, they all back to down. >> we caught up with stephen booth earlier in the program and his point was this was the states. this was the individuals backing younger. it is not the best message to centered >> -- to send. >> if we stay in the eu

unreformed, we lose on .2 million jobs. -- 1.2 million jobs. >> there is nothing to fear from leaving the european union if the prime minister, david to achievefails reforms before the referendum. they have to win the election to have the referendum. it is speculated that boris johnson made run for parliament because boris johnson delivers his report here at bloomberg. we will be speaking with him. don't miss that interview, 10:15 with guy johnson on "the pollster >> we will bring you -- "the pulse." >> we will bring you the interview with nigel johnson. ♪

>> welcome back. we just had earnings from the u.k.'s biggest manager of pension assets, legal and general. we are joined by the ceo, nigel wilson. operating profit up 11%. annuity assets up by 20%.

at theunder management investment management arm are up by 7%. a lot of ups. you have had a good half year. >> we have had a fantastic half-year. i think people are beginning to recognize how socially and economically relevant we are. we have been around for 177 years. we will probably be around for another 177 years. we have lots of good things going for us. >> we will start with this and move on. it was the bombshell. we talked about it other was. 11% over theell next 11 days. you have recouped all those losses and more. it seems to have passed. tell us about the individual annuity business, how it is fared since march. >> the chancellor called me after the speech and said, what did i think of his budget?

at the time our share price was down 12%. we had a lot of unhappy shareholders. general, we are supportive of the efforts that the chancellor is trying to implement here in the u.k., to give better choice and value to customers. i don't think we can moan and groan when they do the right thing, even though it has a short-term negative impact on our business because we have to be seen to be doing and supporting the right thing. we expected individual and fall 40 and 50% this year and next year but we will develop new products and we are excited about the wider market opportunities that this presents to us. >> talk to me about those wider market opportunities, those new products. not that i am anywhere near considering what to do with the pension fund. it is a time of great thought for people in my age group of, where do i look? this offers great choice. what will we see on the table

over the next 3-5 years? >> there are two areas. one is the housing issue. lots of people are capital-rich, income-poor in housing and we have to figure out to monetize that to get a new source of income. we will see a lot of innovation around that for pensioners. they will move to purpose-built accommodation because we have been poor at providing retirement solutions in the housing market. it iss all. -- it is one-size-fits-all. the second product innovations are going to be bound around more flexible income drawdown products. it has been a high network individual product and that is what we have in our product offering at the moment. we have seen a lot of innovation in that area, which will match people's outgoings with the cash flow we can generate from being more innovative. a good set of results.

lots of positives. as we go into this recovery mode, how are you seeing the flow of funds into the business? is it a lockstep change? is a gradual? is it a trend that you have seen before? how strong is the inflow of cash? >> the annuity business -- assets went up by 20%. a number of people thought we would suffer but that is contrary to what has happened. you will see us expanding a very successful business that we have developed here in the u k into america and into your. all economies have the -- into europe. all economies have the same issues around pensions and retirement. we are in many ways the global market leader in global pension leading. opportunities are man's across the world and we will can the that duty to brokered >> will we see -- continue to grow. acquisitions,ther

we bought into cedar assets a year ago. that has been successful. a u.s.-d.c. business which we are pleased with. we boughtortuitously it in the united states. it will be a relevant after the chancellor's change. i would like to say we were brilliantly insightful but it is not true. we will claim out insightful we was when we was -- when it good for us. >> stay right there. he will get his stage hat on. we will get to equity markets, all the things he knows about. ♪

welcome back. i am mark barton. this is "countdown." nigel wilson is here, ceo of legal & general. get your stage hat on. we're going to fire questions at you. when is the first hike? >> 11 this year. i think the economy is doing incredibly well. i think you will see a jump towards the october-november period unless it is a political decision and they put it back behind the election. >> a fix and monetary poly? >> carnegie is saying this is the new normal. the head of the bank of england,

the new normal will be back up around 2.5%, 3%? would you agree? would that be good news? >> we are pretty indifferent. in terms of our business. we would like to see u.k. plc. we would like to see the u.k. economy doing better. a lot of small steps. i am a great fan of the charlie been approached to interest rate movements. it upk he is right, bring bit by bit. we have seen too much volatility in the world. >> how is the u.k. doing? london ticked great but the rest of the u.k. needs to see the light? >> i think everyone should be applauded for what they are doing. london is doing incredibly well but we have to replicate that success elsewhere. birmingham and manchester, leeds, liverpool, the cities of the north and the scottish cities. they are not growing fast enough. it is a unique global situation, the differential between the

largest city and the rest is too wide. it does not exist anywhere else in the western world. >> equity versus bonds -- discuss. >> there is so much uncertainty in the world at the moment that people are very nervous. at the corporate levels, they are stumbling in the dark trying to do imminent types of deals one week and dropping them the next week. i think corporate are under investigating -- under investing in their businesses. we outsource too much to china. we have not developed enough business investment philosophy around businesses at the moment. we are not growing as fast as they will like them. >> should the u.k. leave the eu? >> everyone seems to be stating the obvious. ifwe get a good deal, go in, we do not, go out. i don't think that is the right question. we are not growing fast enough in china, india, africa. there are exciting things happening elsewhere. we are hanging onto our trade

with europe but we are not expanding the expansion businesses fast enough. >> we will have to leave it there. nigel wilson, ceo of legal & general. coming up, the wrath of investors. ♪

>> welcome back to "countdown." i am mark barton. we are looking at the dollar against the euro approaching the strongest and almost nine months. there you are. 1.3364. it was almost a month ago that the euro was up at 1.40 against the dollar. we had strong data yesterday on factory orders and service activity. tensions over ukraine are increasing as well. the euro is down to a nine-month low against the dollar index, which is a gauge of wider

currencies. it is almost at its highest level since september. comments from the federal reserve bank of dallas, president richard fisher worth watching. fellow policy his makers are becoming more hawkish and what is happening into also affecting the. >> lord mayor boris johnson is ready to push u.k. to leave the european union if david cameron fails to achieve sufficient performance. speech,ct of the johnson said the best option would be for the u.k. to remain in a reform eu. the london mayor will be live on bloomberg. welcome back. german factory orders. they dropped the most in more than 2.5 years.

it is a sign of geopolitical tension with russia that are weighing on the largest economy. german officials said orders slid 3.2% in june compared with a forecast of a rise of .9%. vladimir putin signaled he is ready to retaliate 40 u.s. and eu sanctions. he has ordered his government to prepare a response. biggest -- the biggest bank in italy and said he is monitoring conditions in russia. >> the bank in russia is a bank with a high level of capital. it is well covered in terms of liquidity, 65% all in all with a good position in terms of liquidity. we are not concerned about an immediate negative effect on credit. we are looking at the situation very carefully.

we understand it could have a big impact. still, i hope a solution will be found in the interest of europe and russia together. >> it seems like those sanctions are starting to bite. ryan chilcote is back with us. these industrial numbers, the bloomberg story is down for more than almost two and a half years. the geo policy is leaving his mark on the economy. >> can i be flip? the real question of the day, was boris johnson's photo taken before the german numbers came out before after? >> before. >> he has had a haircut since. >> i love it. the factory numbers are interesting. factory numbers down 3.2%. the biggest drop in two and a half years. only three saw a drop in manufacturing numbers. even then, they only sought .5%.

3.2 is a big drop. that has ignited the debate, isn't russia? we talked to markets. if ukraine stabilizes, don't worry about this. things will improve. ing says ukraine, the situation there, russia, and the effective sanctions is immaterial because this drop in orders had nothing to do with them. they came from europe off peers. >> that is more worrying, isn't it? >> it is worrying. 8.2% was the drop from european peers. >> that must be the most worrying thing for mario draghi when he sits down tomorrow. not only does he have disinflation, but this is the mothersh. this is the homeland. >> talking about russia, putin -- >> the only thing i wanted to say more about the issue are the sanctions. we're going to go onto that and a second. we have those phone numbers yesterday and we heard the

president of evoke. it is there job to measure business sentiment on the continent and business would have been posuitive -- positive because of russia. you mentioned putin speaking hiserday, saying, asking government to prepare more sanctions or sanctions against western europe. this would be the first retaliation. the big issue, the big speculation is that the russians ver-flightto ban o rights. if you want to go from western you can fly over siberia. we saw western european airlines really get hit on that yesterday. finair one of the biggest losers. >> the london-based lender is one of the less risk-averse

businesses. they had their second profit warning this year and it is also prized according to our next guest. think for joining us today. peter sands, the ceo who has been in his job since november 2006, is he under pressure? >> he is under pressure. as you see with all the investors talking, we have seen this time and time again. when management comes under pressure, they go over the cfo's had. [laughter] more, the ceo or the chairman. >> do you think he would survive the year, 2014? >> that is for the investors to push for or not. there, itfore we go is a valuable franchise. it is unlikely you can create such a franchise today given so

many brought markets and the amount of regulatory onslaught that is the banking sector. having said that, i think management compensation plays a great roll into where they have ended up. think about the lumbar growth. it has grown by 350% in the last 10 years. 28% means roughly about long growth. with eps being the primary driver of management compensation, they have traits that to the detriment of her much every other factor. >> you would also suggest, and this is a fair point, that they had this huge growth but they have not made the provisions. number, you hsbc's are looking at them up 60%. -- 16%. a are not good numbers for a bank that has taken on so much risk. are they better at managing it? >> that would be one argument. >> you would say that they are better? >> there are two arguments.

one is that they are better than any other banker and they are able to allocate risks faster on the balance sheet. they are not able to get hit by detriment spirit of generally -- detriments. generally when you grow as fast as you do, and parents are one or two cycles behind. issue.mes an it is about six months that -- back, but management have a lever to reduce the gross balance on the balance sheet which means long growth will slow,. they have said that impairments have grown by the high to mid-teens growth but the outlook looks ok. willnk one of these two come down. >> you have great stats from earlier.

in terms of peter sands' delivery -- >> total return in those states, 3%. the share price performance, -3%. the ftse index is down 6%. >> i think those stats are fantastic. -- banks europe analysts were looking at status just given to us. this is not such a bad story -- or is this a bad story that is going to become one? on those stats, can you defend that? >> they did not get hit because they did not do any of the investment banking. what you had was a time where the emerging market was doing well but that was not. what we have is a macro that has slowed down and is not helping them. when you look at the total of their presentation, if you go through three or four bank

years, you find that each geographic area has toned down in terms of what they get to the market. >> what more do they need to do to stabilize this bank? >> there needs to be a review of the loan book and some certainty over the cycle and numbers. once we have that, i think it will take sometimes -- there is a restructure underway but also and would need to fine tune all that will take time. >> we will see how that all turns out. that is arun melmane, analyst. bans ipads and macbooks from being purchased with public money. find out why. ♪

>> welcome back to "countdown." i am manus cranny. british airways are scrapping west african roots in response to the deadly ebola outbreak. most airlines are flying with hygiene checks. british airways is suspending flights to sierra leone and

liberia until august the 31st. walt disney's profit topped estimates. by "captainueled america: the winter soldier." the 2013 hit film "frozen" continues to deliver profit for the company. -- it hassence has presence in error theme parks. it is down in orlando. it will be part of abc's prime time programming on sunday nights, which we are really happy about. there is a "frozen" theme to "once upon a time." is that right? there is a lot in my head right now. i feel like there is a lot more life in "frozen" and we have seen. >> apple and samsung have struck a deal to wind down their global patent battle. the companies have agreed to drop all suits against each

other in countries outside the u.s. the companies may be nearing a conclusion from what has been a drawn-out patent war. >> 7:44. joining us for more on apple and davidg on this deal is who is in hong kong. good morning. >> good morning, guys. microsoft,e saw from the windows operating system which was barred from the list, according to our sources china is releasing orders to basically excluded the apple ipads and macbook laptops from what they fromd the eligible list which government ministries, local governments, central government units can choose and buy from. the reason they basically brought it up according to the sources are security concerns. .ou look at apple products

we have a specific list of 10 including ipads, ipad mini's, macbook air's, macbook pros among others. this related -- this latest order does not include all foreign brands. if you want to order something, you can still buy products from hb, dell, samsung, and toshiba. apple declined to comment at this point and time. the next review for the specific list will happen in about five months, around january 15. to recap what we know, china releasing orders to exclude the apple i put it -- i've had an laptopipad and macbook from these list on what you can spend as far as public money is concerned. last month, state run cctv reporting that features of apple's iphone, the software,

may result in what they call a leak of state secrets. apple has rejected those claims. that is what we know. back to you guys. in germanpected slump factory orders. some people lame political risk from russia. we will see what else is behind the drop. the futures are indicated lower around europe. talk aboutus next to market risk. ♪

>> will come back to "countdown." minutes to go. jon ferro is with us. ryan chilcote is with us. futures are lower. germany, wow. >> terrible, manus. the numbers are shocking. factories are down 3.2% on the month. it is interesting what you put up that the german ministry has said that it is geopolitical risk. foreign orders are unchanged outside of the europe tour -- european monetary union. eurozone orders are down 3.4%. >> when we talk about european orders down 10.4%, russia was not cranking out the gas in june. >> a lot of people will argue

that journalists, analysts, everyone is quick to jump to conclusion that economic weekend is erosion oft confidence within the europe itself because of geopolitical risk. dismiss't think you can the eurozone being week because of what has gone on in russia. it could be a sentiment issue or a rush issue, but i think the numbers speak for themselves. you have a weak eurozone still. >> is not going to change anything tomorrow. from what we have surveyed, they will hold until these targeted ltro's come into the system later this year. >> .4% inflation last year and inflation will continue. >> yesterday, we saw the president of the ifo blaming is thens against russia reason for negative sentiment. >> what is the significant --

significance of the comments from poland that there is a buildup of troops on the ukraine-russia border? the threat of invasion is imminent or not? >> the foreign minister of poland is very outspoken and he had been the town crier when it comes to warning on russia and russian risk. we should not be too surprised about his comments. what he is saying is russia has tens of thousands of troops on the border and it has one of two plans. one, to pressure ukraine. i guess we can all see that. that is logical. the second, he argues that russia may be about to invade. this is something that perhaps the markets have forgotten. the ukrainian military is very close to moving on donestk. a city of 400,000 people. tens of thousands of troops on both sides. it would be a bloodbath. the concern is the russian

president, as guardian of ethnic russian speakers around the world, would feel compelled to intervene with a peacekeeping force to protect the people of tsk should the ukrainians move. it could happen in a couple of weeks, but it is just a "could." >> translate that risk into markets. theyour government bonds in united states of america are hitting a two-week low. money is going into the short and in u.s. treasuries. , -- aversion >> manus told us to buy. >> the s&p -- >> manus has been tricky this week. he has got it right, this one. >> why is there always a fight at the end of "countdown?"

i want to and the way -- end the show with mma. today, two deals have unraveled. let's start with time warner, 20th century fox. case you murdoch, in did not see it, fox pulled the plug on their bid for time warner. it means to good thing. a lot of investors can see this as capitulation. they came out and said we would not make any bids. done deal. the second issue is what does it mean for fox investors? they loved it. after foxwas down 11% announced their bid. people were concerned that mr. murdoch would be a little undisciplined in his efforts to win time warner. it went up 14%. in addition to everything else, that risk is gone and he had the share buyback. pulld fox and the murdochs the plug because the prospect of going out $100 a share for time

warner was going to mean that -- debt? quickly, sprint -- i have to do the other deal that has fallen apart. sprint and t-mobile u.s. does not look like it will happen. we have spoken with a person familiar with the matter. number three and four in the united states. there were doubts. >> financing issues derailed it as well. >> who now could show an interest in chemo -- the mobile -- t-mobile? iliad could show an interest. sprint was 40 last week. if they bet 37 because of the lack of regulatory, -- >> it has really wrapped up their subscriber boost. >> 9000 last quarter whereas sprint lost 200,000. when you look at them as individuals, t-mobile seems to be better on a subscriber bases.

"on the move lowe's quote is next. is lashing out. how will the news hit the markets? jon and manus will be with you. ♪

max welcome to "on the move." lower. pointing plenty of things to look at. the possibility of retaliation from vladimir putin. in those terrible german factory numbers. let's start with you. >> don't get mad. get even. that is the message it would appear the russian president has latched on. he is threatening western countries with sanctions. that means later

in the show. >> we're going to keep an eye on standard chartered. profit expected to fall by more than 20%. >> german factory numbers much lower than expected. if you look at the numbers themselves they .2 weakness in he euro zone. futures low. we expect a low open as well. >> you covered it all. equity markets are lower. where will the retaliation come? . theny, you are right downtrend was in the domestic market in europe. a drop ofere they saw 10%. russia was a big issue.